EB-5 financing can be a useful tool for developers. But planning and structuring a deal with EB-5 funding takes time. Developers seeking this capital need to balance concerns of senior lenders with those of an EB-5 lender, if EB-5 financing comes into a deal as a loan subordinate to a senior loan. Most importantly, you can't rush a deal. Get your core terms hammered out early.
You need to have key stakeholders in a deal at the table early on in planning: senior lenders, strategic equity investors, a regional center and a broker-dealer or market-maker all may need to come together to agree on key deal terms before an investment prospectus is finalized. All of the immigration considerations have to be front and center at the outset of deal planning as well.
Can EB-5 financing come into a deal seamlessly? Yes. But be prepared.
All deals have points of stress. If you are doing your deal right, there is real negotiation among the parties on terms. There is also some tension and uncertainty. You don't save time or money by pushing important issues onto the back-burner. Tackle deal challenges head-on. Have securities counsel follow the development of your business plan to ensure that your disclosures are relevant, robust and protective of all parties in your deal.
Bringing a private offering into the market is no small task.
Our advice at Mintz Levin is simple: treat your EB-5 deal like any IPO.
EB-5 offerings require the same care, talent, planning and diligence needed to prepare and launch an IPO. Don't cut corners. And every deal is different, requiring early planning on how you will communicate with prospects, raise funds, close your deal and manage investor relations.
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